An crypto author has discussed how short-term Bitcoin holders provide tips on when to exit.
Bitcoin Short-term Holder SOPR is not currently in the distribution area
In a secret QuickTake post, an analyst discusses when bitcoin is distributed and accumulated based on the behavior of short-term holders. Short-term holders (STHS) refer to BTC investors who have purchased coins in the past 155 days.
These holders make up for one of two major aspects of the BTC market, with the other cohort known as the Long Term Holder (LTHS). Unlike Hodlers, STH tends to respond to market events, so their metrics are easy to register.
The indicator shared by the STH-related indicator is the output profit margin of expenditure (SOPR). This indicator basically tells us whether investors are selling their coins for profit or loss.
SOPR decides this by looking at the transaction history of each wallet to participate in a sell transaction to see the price of the coins it receives. Transfer the previous price of the profits below the spot price in the sale, while the loss loss price is the opposite.
When the value of the indicator is greater than 1, this means that the holder realizes net profit as a whole. On the other hand, it indicates the dominance of causing losses under the mark.
Now, here is a chart showing the trends in Bitcoin SOPR specifically targeting STH over the past few years:
The value of the indicator seems to have been above the 1 level in recent weeks | Source: CryptoQuant
As can be seen in the figure above, analysts highlight the areas of the two indicators. The lower area of the green shade corresponds to the significant loss of STH. According to quantification, whenever STH displays this behavior, it is usually a good time to start accumulating Bitcoin.
Likewise, the red area corresponding to the profits of this queue may represent the distribution opportunity of cryptocurrencies. From the chart, it is clear that none of these areas capture the tops and bottoms of BTC price perfectly, so analysts require that the indicators only sell and buy step by step as they enter the corresponding areas.
During the trough earlier this year, STH SOPR was immersed in the green zone, meaning the group showed surrender. With the recent price rally, the indicator has recovered from the 1 mark, but so far, the red zone has not been destroyed.
So, at least with this metric, the time to start distributing Bitcoin may not be here yet.
BTC price
Bitcoin has recovered more than 10% over the past week as its price has exceeded $104,000.
The trend in the BTC price over the last five days | Source: BTCUSDT on TradingView
Featured images from dall-e, charts from cryptoquant.com, tradingview.com
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